MIL-HDBK-1004/10
Section 13:
ECONOMIC ANALYSIS
13.1
Importance of Economic Analysis. Economic analysis is a
methodology utilized by decision-makers to compare quantitative informati
and select alternatives based on economic desirability. Beyond this, suc
issues as resource availability, fluctuating operation costs, and
uncertainty have significant impacts on the decision-making process.
Cathodic protection is a form of corrosion control. Economic
analysis is a tool that allows an evaluation of system performance (with
without cathodic protection), so that an assessment may be made in the
context of such factors as safety, health, and operational necessity.
13.2
Economic Analysis Process. The economic analysis process consi
of six steps (refer to NAVFAC P-442):
a)
Define the objective
b)
Generate alternatives
c)
Formulate assumptions
d)
Determine costs and benefits
e)
Compare costs and benefits and rank alternatives
f)
Perform sensitivity analysis
The drawing above summarizes the process. All six steps must be performe
to prepare a thorough and objective analysis.
13.2.1
Define the Objective. The objective statement should state the
purpose of the analysis. For example: provide a water pipeline, 4 inche
in diameter and 10,000 feet long. It should be unbiased, well-defined an
incorporate a measurable standard of performance.
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